Our investigation

We found the bank failed to respond to Summer’s signs of financial hardship in mid-2022 – a period coinciding with the COVID-19 pandemic and lockdowns – and also that it failed to advise her, when told she wanted to switch to interest-only payments, that she had a right to seek this change on grounds of unforeseen hardship. The bank told us it did not have to respond to her request because she was not in arrearsat the time. We did not accept that argument. We expect banks to work with customers who say they will soon be in financial difficulty to try to come to a suitable arrangement. This applies regardless of whether a customer’s account is in arrears or not. We also found the bank fell short of its obligation to communicate promptly and clearly with Summer.

However, we had doubts about whether, given the opportunity, Summer would have made a request for hardship assistance – or that it would have been accepted. For one thing, she did subsequently make an application but then withdrew it. She also had longer-term problems with her business – a principal cause of her financial difficulties – whereas financial hardship assistance is only ever intended to offershort-term relief. In essence, we did not consider the bank’s failings had harmed her financially. We did, however, consider the bank’s poor communication and failure to at least consider her requests for help had caused her considerable stress and inconvenience.

Outcome

The bank offered $1,500 compensation for stress and inconvenience, an offer Summer accepted.